LICENSING BILL.

moved an Amendment to insert after the first "the" in the first line of subsection (1) the words "expiration of the lease of any licensed premises granted prior to the 5th day of April, 1908, or if there be no such lease, after the." the object of the Amendment, he said, was to mitigate a great injustice which the provisions of the Bill would undoubtedly inflict on the leasehold occupier of licensed premises in some cases, and of the reversionary owner of premises let on lease in other cases. What would be the position of the leasehold occupier of licensed premises under the Bill, assuming that he was not compensated during the fourteen years reduction period? During all that time he would pay the levy, in the first instance. Then at the end of that time he stood to have the whole of his interest taken away from him summarily without compensation, and at the same time he remained burdened with conditions of sale which might very possibly include payment for repairs, and also in many cases he was still saddled with the interest of the money which he had borrowed in order to acquire that interest. He could give as one example a lease granted in 1907 by the Ecclesiastical Commissioners for eighty years at £200 per annum rent. In addition they exacted a premium of £3,000, and they made the lessees spend £6,000 on the premises and promise to spend £1,500 more in 1918. All this burden, imposed by a Department of the Government, would remain on the unfortunate lessee, and unless he had what he supposed, on the whole, would be the good luck to be turned out within the fourteen years, all that burden would remain to him and to whoever acquired his rights after him
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for the whole term of seventy-nine years. There was another instance, in which he could not give the names, but they were all vouched for by the Central Board of the Licensed Victuallers' Protection Association of London, and he did not doubt that that body would, if challenged, at any rate, give the names in private. They vouched for examples like this—unexpired term of lease thirty-two years, licensed victualler's own money invested £16,000, of which £6,500 remained as a private loan. There were plenty of other cases—twenty-eight years unexpired, private loan £21,000, on which interest had to be paid; seventy years, private loan £20,000; fifty-two years, private loan £2,500. Much heavy and irreparable damage would fall upon the leaseholder, and in many cases upon the mortgagee as well. Another position was where a short time had to run, and in that case it was not so much the leaseholder who might suffer as the reversionary owner. In the case of a short term the reversionary owner would stand to have the full value of the licence, which in many cases, of course, was infinitely greater than the freehold, taken away from him. He supposed the right hon. Gentleman the Member for Spen Valley and others would say that these persons ought to have known the risks they were running. Ought they to have known? Certainly not before the time of Sharpe v. Wakefield. Ought they since? He contended that they certainly could not know the risk they were running of anything like the procedure which the present Bill contemplated. No doubt after the judgment in Sharpe v. Wakefield there was considerable alarm among all connected with licensed property. But as the limitations of that judgment became better understood it became clear that many of the original forebodings were very greatly exaggerated. For example, in the years between Sharpe v. Wakefield and the 1904 Act the average reductions of full licences, at any rate for redundancies, were only thirty-two a year, which worked out at a proportion of about I in 2,000 every year. If that was the risk, very light insurance premiums would have enabled all those interested to have fully covered their
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risks. He did not know what premiums the corporation they had heard so much about yesterday demanded, but he was certain they could not possibly in the face of the present Bill renew their policies at anything like the premium when the risk was only 1 in 2,000 a year. Again, the expectation of the reversionary owner of licensed property was distinctly held to be good by two decisions in Courts of law. In the first instance, there was the case of Bolton v. London County Council in 1893, whore the County Council tried to establish that the licence was granted nominally for one year only, and that there was no lasting value arising from the possession of the licence. The Divisional Court, Justices Day and Collins, entirely disregarded and put that aside, and said the market value of the property must be taken into consideration, and the decision of the arbitrator, admitting the reversionary value arising from the licence, was upheld. In another case, Cocks v. Lady Henry Somerset, in 1895 it was decided that Lady Henry Somerset, having a life interest in some licensed property, was not entitled to close the house and dispose of the licence, because of the ultimate reversionary benefit. Those who entered into those contracts, whether they were the leaseholders or the owners having a reversionary interest in future, or whether it was the case of a man having a reversionary interest in licensed property, were fully entitled to the expectation that the right which they bought would be guaranteed by the State, and if that was so before the 1904 Act their title was infinitely stronger since. Therefore, great as was the injustice to every class, the position of those whose interests were involved, where there was a question of a lease of licensed property, was very much greater, and it was that injustice which he asked the House to obviate. He was quite certain that in no other description of property would at any rate the majority of hon. Members opposite adopt or defend the same procedure which they applied to licensed property. He knew before this controversy arose that he held different religious beliefs from those of the majority of the House, but till this controversy arose he never knew how vast was the difference of his religious
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belief from that held by the great majority opposite, because he was convinced that, with the exception of the hon. Member for South Hackney and one or two other chosen spirits, they were all guilty of the Manichæan heresy, which held that certain forms of matter were essentially evil in themselves and not merely in their effects, and that must be the belief of hon. Gentlemen opposite with regard to alcohol. They must look on it as something essentially vicious, and on anyone having to do with alcohol or making any profit by it as tainted by some special vice which disentitled him to the ordinary consideration that all other of His Majesty's subjects enjoyed. Only on this theory could he explain their attitude, and it was to obviate the worst injustice which this attitude produced that he moved this Amendment.

§
Amendment proposed—
In page 3, line 9, after the first word 'the,' to insert the words 'expiration of the lease of any licensed premises granted prior to the fifth day of April, nineteen hundred and eight, or, if there be no such lease, after the.'"—(Mr. James Hops.)

said the Amendment as it stood would in the first place make nonsense of the clause. From the drafting point of view it was quite impossible and would have an effect entirely different from that which the hon. Member had mentioned.

said the Committee was entitled to ask that when an Amendment on so serious a matter as this was put down the necessary consequential Amendments should be put down also. The effect of the Amendment if accepted, unless greatly modified, would be that the whole of Clause 3 would not operate until after the termination of the longest lease
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now existing for any house. The monopoly value would not be taken until the longest lease had come to an end. Secondly, if it was modified in that particular it might have the opposite effect with regard to other existing leases which ran out, say, next year, and it would bring the monopoly value clause into operation as respected these houses immediately and would give them no time-limit. As soon as the lease came to an end the monopoly value would be taken. He failed to see why they should make this discrimination between the house which was held on a lease and a house which was held freehold. There were perhaps in a given neighbourhood two houses, one belonging to one brewery company and the other to another. The first had been bought freehold and was the absolute possession of the company, and in the case of the second a long lease had been purchased perhaps for a lump sum. In the case of the first house, if the principle of the Amendment was accepted, the monopoly value would be taken as soon as the time-limit came to an end. In the case of the second, no monopoly value would be taken until the end of the lease, perhaps seventy or eighty years hence. Obviously the company which held the freehold house would be put in a most unfair position in contrast with the company which held the leasehold house. They would be paying year by year the monopoly value, the trade would be undoubtedly handicapped in competition with the other house, and he failed to see from the point of view of the liquor trade itself how a discrimination of this kind could be defended. The hon. Member said the leaseholder at the termination of the time-limit when he began to have to pay the monopoly value had a continuing obligation. He had to continue—in spite of the time-limit and the monopoly value charge—to pay the rent which he undertook to pay before this legislation was introduced. That was the point of substance the hon. Member had in his mind. But so had the freeholder who had a mortgage on his premises in precisely the same way; so had the brewery company which had issued debentures. They were all in precisely the same position so far as
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this point was concerned. Therefore, there was no reason whatever to discriminate between the leaseholder as such, and all those other persons. If they had any objection to raise at all it was against the time-limit clause as a whole, and not specially on behalf of the leaseholder as distinct from those other persons. Therefore, the case for this Amendment disappeared, and they came back to the general discussion of the time-limit. Their answer on the main point was simply that with regard to the leaseholder as with regard to the freeholder, or with regard to the brewery company which issued debentures, at the end of the time-limit they would have still in their possession the actual buildings which they had undertaken to rent, and on which the mortgage or the debentures had been issued. With regard to monopoly value it was their duty during the interval to put by a sum sufficient to enable them to meet the obligations they had entered into. The question resolved itself into the larger issue whether or not the time given was sufficient for the purpose. There was no reason whatever for drawing any discrimination between various classes of persons.

Slid he did not propose to dwell on what the hon. Member had described as the larger issue, because he had spoken on that, but a few words had fallen from the hon. Gentleman on which he wished to speak. In the first place he had criticised very severely the action of his hon. friend in having put down an Amendment, the general purport of which was perfectly clear, without at the same time having put down all the consequential Amendments required to carry it out in detail. He could not imagine a criticism coming with a worse grace from the Treasury Bench, or anything more inconsistent with Parliamentary convenience or Parliamentary practice than the way in which they had treated the House. They came down in the morning and found they were expected to discuss Amendments of which no notice had ever been given, and of which they had no conception when the Closure Resolution was moved, and that without a word of explanation
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or apology. He would be out of order if he were to pursue that subject further. He only mentioned it in order to say he hoped they would hear no more as to putting down Amendments without notice. No crime, in respect of drafting, would equal in magnitude those which the Government were in the habit of committing. The only other issue which the hon. Gentleman raised besides the broader issue which he left to others to discuss was that this only dealt with one point of a general grievance. That might be true, but he had yet to learn that it was an adequate reason for not accepting an Amendment dealing with a small portion of a grievance that it left a large portion of the grievance still unredressed. Beyond the attack on his hon. friend on the drafting point, the hon. Gentleman had said literally nothing against the Amendment except that there were other grievances, similar in character and not less in magnitude, affecting brewers, landlords, and other classes. But that was no reason why they should not deal with the leaseholder, and he could not imagine that anything which had so far fallen from the Government supplied an adequate reason why the Amendment should be withdrawn.

said it was a little difficult to understand why the hon. Gentleman should make any point at all about the drafting of the Amendment unless the Government were prepared, if the Amendment was properly drafted, to accept the spirit of it. The hon. Gentleman had not told them, and it must be assumed that the Government was not prepared to accept the spirit of any such Amendment. Therefore, it was no use criticising its drafting. On the merits of the Amendment which had received such perfunctory treatment there was, perhaps, a point of considerable substance. The hon. Gentleman said there was no difference in quality, and he gathered his view was that there was no difference in extent either, between the grievance of the leaseholder and the grievance of the freeholder. Therefore the suggestion was made that his hon. friend was ill-advised and inconsistent when he attempted to apply
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a partial remedy to the case of the leaseholder, whereas the only logical resource open to him was to deal with both the case of the leaseholder and the case of the freeholder. Five minutes of reflection would show how ill-founded such a position was. The hon. Gentleman said the leaseholder was in exactly the same position as the debenture holder. What the Government had told them from the First Reading until the present day was that under the magnanimous provisions of the Bill in fourteen years the debenture holders could all pay themselves off. They were told that this was an annual licence and it was only the good fortune of the licensed victuallers that they happened to be governed by a Ministry of unexampled generosity who had given them fourteen years to cover their financial loss in regard to something for which they were only entitled to one year's compensation. What had they to say with regard to the leaseholder with forty or sixty-five years still to run of licensed premises which were not worth the rent now being paid for any other purpose at all? If they would not produce that rental for any other purpose, what was the use of saying that such a leaseholder was in the position of a debenture-holder who could recoup himself in fourteen years? Such a proposition would not stand examination for a single moment. He would take for example the case which had constantly arisen in his own experience in the Courts—the application of a man who had taken a lease of premises say for sixty or seventy years. Those men were not wealthy brewers, but they were persons who in order to take advantage of the licence which they had been fortunate enough to obtain must of necessity borrow money and could only carry on their business by extensive loans. Now what was the position of those men who had incurred such large pecuniary obligations to enable them to take up the licence? They would ask themselves as business men whether a licence was a security on the strength of which they were entitled to borrow money. Practically there could only be one answer to that question. With regard to the criticism made by the hon. Member for Hackney of the right hon. Member for the Spen Valley's con-
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nection with a financial paper, he wished to say that on the Opposition Benches they did not make the slightest attack upon the good faith or earnestness with which the right hon. Member for the Spen Valley had championed his view of the case for many years. At the time the right hon. Gentleman was the responsible editor of that paper he must have been aware of the tenor of the articles appearing in it. Supposing one of those persons who obtained a licence wished to decide whether it was wise to borrow a large sum of money over a period of years he would say to himself: "Is it a good investment and is there a reasonable prospect of the permanence of the licence?" Financial papers like the one which was edited by the Member for Spen Valley would be ready to advise him that it was a good investment.

In the case of Belton against the London County Council it was contended by the present Lord Justice Moulton that when taking licensed premises where there was a reversionary right there ought not to be compensation on the assumption that the lease gave an expectation. The learned counsel said that they ought not to compensate the holder of the reversionary interest, because the licence was only an annual right. That contention was carefully considered, and it was decided that there was no such limitation, and that it had the value which a reasonable expectation must be allowed to possess, and that was the market value. If a man took up a lease for seventy years at £300 or £400 a year, of premises which if not used for a licensed victuallers' business would not be worth £100 a year, were they going to propose to saddle that man with a loss of the difference for a period of forty or fifty years? It was preposterous to say that there was no injustice in such a case, and it was an injustice which hon. Members opposite must be conscious that the country would never allow them to commit. For argument's sake he would assume that the Government were right from the moral point of view and that the policy of the reduction of licences on this Bill was a sane and well-considered policy. Surely it was possible to achieve those moral objects and at the same time deal adequately and even liberally with men
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who had been encouraged by right hon. and hon. Gentlemen opposite and their predecessors to invest their money in the trade.

When the Member for the Spen Valley said that everybody had received a warning that the State could repossess itself of that which it ought never to have parted with, two distinct propositions were involved: first, that the State ought never to have parted with it; and, secondly, that, having parted with it, the State could place itself at any moment in the same position as if it had never parted with it. But the fundamental truth of all this was that the State had actually parted with it. Let them assume that it had done so for misguided reasons. The Leader of the Opposition said last night most convincingly that the trade did possess and had been held by every legal tribunal to possess the right to be compensated on the market value which had been judged by lawyers and by men of business, and had been assessed by ordinary business methods which were always applied when considering value. It was impossible to deny the justice of that method. The Government might refuse to accept this Amendment, but he ventured to call the attention of private Members of the House, many of whom he knew were profoundly and seriously concerned in this matter, to the fact that the moral object of this Bill could be secured without injustice, and he hoped that even at the eleventh hour they would resolve that they could serve that moral purpose better by dissociating themselves from this proposal.

thought the Leader of the Opposition had entirely misconstrued the logical meaning of the statement made by the Under-Secretary, who was quite right in the interpretation he had placed upon this Amendment, which the Opposition must realise did in its very essence, spirit, and intent raise the whole question of the length of the time-limit. The mover of the Amendment had stated that those who had invested in reversionary interests had no reason to believe before Sharpe v. Wakefield that their investments were in jeopardy.
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Surely when the hon. Member made that statement he was oblivious of the fact that in 1871 there was introduced in this House a responsible proposal for a time-limit of ten years.

said that The Times—an organ of public opinion to whose weight and authority hon. Gentleman on the other side would defer—in commenting on the proposal of Mr. Bruce, wrote in 1871—
Every public-house for some years past must have been taken with full notice of prospective amendments in the law, not to speak of possible additions to rates and taxes.
Speaking of the actual terms of the compensation proposed, The Times wrote—

*THE CHAIRMAN

I think the remarks which the hon. Member is making would be more appropriate on the next Amendment. We are only dealing now with the exception in the case of leaseholders, and the hon. Member appears to be addressing himself to the wider question.

said he would, of course, bow to the ruling of the Chairman, but he desired to say that he was only referring to a line of argument adopted on the opposite side. The purpose of this Amendment was to show that the precise term of time-limit suggested in the Bill was inadequate to compensate those who had invested their money in licensed premises. There were many hon. Members sitting on the Ministerial side who were prepared to consider any reasonable argument on that particular head, but what they objected to was the attempt to discredit the whole proposal of a time-limit on matters of detail. The onus of proving that the time-limit proposed by the Government was not sufficient lay with hon. Gentlemen opposite and not with those who were satisfied with the proposals of the Government.

said that this Amendment brought before the Committee the precise injustice which was inflicted by the proposals of the Government. He was not without hope that some hon. Members at least would bring themselves to see what was the real point of the objection to this subsection. The Under-Secretary for the Home Department had said that, if this Amendment were accepted, they would introduce unfairness as between different licence-holders; but that was not the real point. He rather agreed with the hon. Gentleman that a freeholder who entered into a contract had a strong claim of a similar character to that of the leaseholder who had entered into a contract. But that was not the real point. The real point of the Opposition objection was that of people who entered into contracts under one condition of the law, and if the law were changed and a different situation created, upon whom injustice was thereby inflicted. The injustice was not got rid of in the case that the Committee were considering by the Government declaring that the injustice was no worse than the injustice often inflicted in other cases. The Under-Secretary made no answer on this point except by saying that the people affected ought to insure, that they ought to create a sinking fund during the fourteen years, and then they would be able to apply that fund in liquidation of any loss incurred. How was that contention consistent with the proposition that no loss was being inflicted? If the Government admitted that at the end of the licence term there would be a loss which had to be met by the creation of a sinking fund, then they admitted the whole case against the Bill. Who would contend that if a property was taken away from a man no loss was being inflicted upon him because he ought to insure against the loss? Take the case of a burglary—and he did not say that this Bill was burglary—in which the argument was the same. What defence would it be for a burglar to say: "Oh! if the man had only insured against burglary he would not
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have suffered any loss." The argument was perfectly nonsensical. He was sure that neither the Under-Secretary nor the Solicitor-General could believe in that aspect of the Bill, They could not say they were not inflicting any loss upon the licence-holder because if he had a sinking fund the loss would be made up during the period. The hon. Member for Huddersfield had put the matter in a different way. He said: "It is quite true we are taking away something from the licence-holder, but we are not taking more than we might do by way of taxation."

*THE CHAIRMAN

I think the noble Lord is not addressing himself to the Amendment now before the Committee.

said he did not dispute that ruling, and he would not follow that line of argument. All he would say of the particular case was this. Here they had the clearest possible case reduced to pounds, shillings and pence. Men who had spent large sums of money on their property and had agreed to onerous contracts in the belief that their licences were to be renewed year after year found by this clause that the right of renewal was being taken away, in addition to a fresh obligation being put upon them to pay a great deal of money. In this way the Government were forcing upon these men a different set of circumstances from those in which they entered into their contracts, and they were transferring the burden which ought to be shared between landlord and tenant entirely to the tenant, and allowing the landlord to go free of the burden. That was a clear case of hardship.

said he hoped the Committee would come to a decision on this Amendment for the reason that they had not much time to discuss the larger question which was to come up afterwards. [An HON. MEMBER: Whose fault is that?] He was not saying whose fault it was; he was only pointing out the fact. The case put forward by the hon. Member who moved the Amendment was not that of the short leaseholder but that of the long leaseholder. He did not understand what the noble Lord
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meant by loss. The phrase ought to be properly defined before the Committee could discuss it. But the point of the Amendment was clear. Assuming that the policy of the Government was right—namely, that there should be a timelimit—the only question that arose was: "Ought there to be an exception in the case of leaseholders, whether long or short?" Supposing a man before 5th April, 1908, intended to carry on his own business and bought a freehold. He gave the full value for it, with all the anticipations that every purchaser or investor under such terms would have. But, suppose in the next street, a brewery company took a sixty years' lease under the same conditions, with the anticipation and prospect of what legislation might be hereafter. The meaning of passing this Amendment would be that the man in his own freehold would have to pay the monopoly value after fourteen years, whereas the brewery company would be exempt for sixty years from the monopoly value. That was the sole point raised by the Amendment.

said the issue involved here was a narrow one. If a man was a leaseholder, he could not get rid of his obligations—he could not sell them in the open market. He was bound under his contract for a period of years. A freeholder could get rid of his. Was the leaseholder on whom this Bill would cast expense to get no relief?

said he did not wish to go into the general arguments. The Amendment, as he understood it, was for the purpose of relieving the leaseholder of penalties when the time-limit came to an end. The majority of these leases were for long terms, and many had fifty years and upwards still unexpired. He wanted to make it clear that this point did not affect brewery companies so much as retail licence-holders. In nearly every case there was an increased price charged for a lease if there was a licence attached to it. It had been recognised by the law of the land that that enhanced value was an obligation on the leaseholder, who, if he lost his
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licence, had to meet that obligation. The Bill proposed to take away licences at the end of fourteen years without any compensation whatever. At the end of the time-limit, whatever that limit might be, the long leaseholder would be left with the obligation to pay the increased rental. The Government said that they could not accept the Amendment. Were they going to break contracts? Most of these leases had been taken up under a contract to preserve the licence; and if the licence were lost during the term of the leasehold, the leaseholder was under penalties to pay a lump sum down at the termination of the lease. There was another point. When premises were fitted up and adapted for a licensed trade, they were not adapted to other classes of business. If the licence were lost, alterations in the premises would be required in order to adapt them to some other business, so that rent might be obtained for them between the termination of the time-limit and the termination of the leasehold. That would be a tax on the leaseholder, who would have to spend a lump sum of money in order to alter and adapt the premises for some other trade or business. Such cases were exceptionally hard, and the Government, he was sure, had not realised the impasse into which they were leading the committee. If they were not prepared to accept the Amendment, they would have to meet this case in some form or other or they would find themselves in a dilemma which would raise an uproar and outcry in the country among some of those who were at present inclined to support the Bill in the belief that it was just to the leaseholders.

said that the answer to the Solicitor-General was that the leaseholder was really subject to time-limit already. The time-limit was the limit of his lease, and the leaseholder had to make all his arrangements so as to make himself secure at the end of his lease. Now, the Government were making him attempt to do that in fourteen years, whereas, at present he had the whole period of his lease in which to do it.

said: Mr. Chairman, before you proceed with the next Amendment to the clause, I wish to call the attention of the House to the fact that, as I stated yesterday, there are thousands of people dying in the streets while you are trifling with this Bill. [Cries of "Order."] I shall not keep order. I am alone in this House, but I am going to fight.

I absolutely refuse to sit down in this Chamber while it refuses to do something for the people who are starving wholesale. I refuse to wait another moment. [Renewed cries of "Order."]

*THE CHAIRMAN

Order, order. Will the hon. Member allow me to ask this question: Does he understand that the House is in Committee, that the Committee can only deal with what the House instructs it to deal with, and that until I report progress we can deal with nothing else?

The hon. Member cannot move to report progress, because that is not allowed to anybody except a member of the Government, under the special Resolution dealing with this Bill. If the hon. Member wishes to raise this question, he should do so in the House, and not in Committee.

I know there is force and machinery enough in this House to compel me to sit down and to remove me from the House. I wish to say that I refuse to obey your orders, Mr. Emmott. [Renewed cries of "Order, order."] I know very well that Members of every section of the House are pledged to the Licensing Bill, but I refuse to obey— [Cries of "Order, order."]

*THE CHAIRMAN

The hon. Member has refused to obey my instructions to resume his seat, and I therefore order him to withdraw from the House for the remainder of the sitting.

I refuse to withdraw from the House voluntarily, until the House has given some intimation of an attempt to attend to this urgent matter of unemployment—

*THE CHAIRMAN

I want the hon. Member to understand what his conduct means. If he refuses to obey my order to leave the House, then I must name him, and the sitting will be suspended and the Speaker will be sent for.

You cannot shame me. [Ironical laughter and cries of "Withdraw."] It is all very well for Members to laugh. [General cries of "Order, order."] Members have been always willing to adopt that attitude towards this question. [Renewed cries of "Order, order."] I shall obstruct the
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proceedings so long as the House refuses to consider this question.

Well, then, I leave the House, as I said before, feeling that I have gained in dignity by leaving this institution, and I hope that—[The remainder of the sentence could not be heard in consequence of loud cries of "Order."]

The hon. Member having started to go out of the Chamber turned back again and loudly exclaimed: "This House is a House of murderers." He then withdrew.